This project will study the effects of tolrestat, an aldose reductase inhibitor,on the progression of diabetic nephropathy, a lesion which is ameliorated in diabetic rats when given an aldose reductase inhibitor. The study will be multicenter double-blind, placebo-controlled. 12 subjects at our center will receive either placebo twice a day; placebo once a day and tolrestat, 200 mgm once a day; or tolrestat, 200 mgm twice daily. All subjects will be screened prior to entry.